Gazelle in 2010

In late July 2010,Israel Ganot, co-founder, president, and CEO of Gazelle had just
successfully completed the Series C round of funding for his company, which had
brought in a fresh $ 12 million from three venture capital firms.

Pada akhir Juli 2010, Israel Ganot, co-founder, presiden, dan CEO Gazelle baru
saja berhasil menyelesaikan putaran pendanaan Seri C bagi perusahaan, yang telah
membawa dana segar investasi pihak ketiga sebesar 12 juta US$ dari 3 capital firm.

Gazelle, based in Boston, Massachusetts, was a pioneer in the industry it had named
"reCommerce". Its business involved buying used consumer electronic devices such a
cell phones and digital cameras from individuals, and reselling those items through
eBay, wholesalers and other channels. To date, nearly all of its activities were conducted
on-line; it acquired goods primarily through its gazelle.com website and resold them
primarily through the one-line retailer eBay. In addition to providing monetary value to
its customers, it hoped to leverage consumers' seemingly growing preference for
environmentally friendly "green" commerce.

Gazelle, yang berbasis di Boston, Massachusetts, adalah pelopor dalam industri

bernama "reCommerce". Usahanya melibatkan pembelian yang digunakan para
konsumen perangkat elektronik seperti telepon seluler dan kamera digital milik
individu, dan menjual barang-barang itu kembali melalui eBay, wholesalers dan channel
lainnya. Sampai saat ini, hampir semua kegiatan dilakukan secara on-line; mengakuisisi
barang terutama melalui website gazelle.com dan menjualnya kembali melalui one-line
retailer eBay. Selain memberikan monetary value kepada pelanggan, pihaknya berharap
untuk memanfaatkan preferensi konsumen ramah lingkungan untuk menumbuhkan
"green" commerce.

Gazelle had done well in 2009, roughly tripling in size to $8.3 million, but Ganot felt it
was at an inflection point. Gazelle had recently formed partnerships with some large
electronics retailers (e.g., Costco, Sears, walmart.com) in an effort to expand the pool of
individuals willing to sell their used electronics. While such deals could give a
tremendous boost to Gazelle's growth, they also carried some risks. In this context,
Ganot wondered how best to allocate his company's newly available financial resources.
Options included further developing Gazelle's technology infrastructure, increasing its
direct marketing efforts to convince consumers to sell their used devices, or investing
heavily in its partnerships with retailers. There was also a longer-term positioning
question : should Gazelle plan to move away from its current model of buying and
reselling goods itself, and towards a marketplace model, in which it would enable
independent sellers and buyers to conduct transactions?
 Gazelle telah melakukan penjualan terbaik pada tahun 2009, kira-kira 3x lipat
dalam ukuran 8.3 juta US$, namun Ganot merasa berada di titik balik. Gazelle baru-baru
ini membentuk kemitraan dengan beberapa retailer elektronik besar (misalnya, Costco,
Sears, walmart.com) dalam upaya untuk memperluas wadah bagi para indivdu yang
bersedia untuk menjual elektronik mereka. Sementara semacam penawaran bisa
memberikan dorongan luar biasa untuk pertumbuhan Gazelle, hal tersebut juga
membawa beberapa risiko. Dalam konteks ini, Ganot bertanya-tanya bagaimana cara
terbaik untuk mengalokasikan ketersediaan sumber daya keuangan baru bagi
perusahaannya. Pilihan pengembangan lebih lanjut infrastruktur teknologi Gazelle,
meningkatkan upaya pemasaran langsung untuk meyakinkan konsumen agar menjual
perangkat yang digunakan mereka, atau investasi kemitraan besar-besaran dengan
retailer. Ada juga pertanyaan positioning jangka panjang : Dapatkah rencana Gazelle
untuk berpindah dari membeli dan menjual kembali barang-barang itu sendiri seperti
model saat ini, dan menuju marketplace model, di mana memungkinkan penjual dan
pembeli secara independen melakukan transaksi?

Company Background

Ganot and co-founder Rousseau Aurelien independently conceived of the idea that
became Gazelle based on their personal experiences of dealing with their used
electronic devices (see Exhibit 1 for biographical information of Ganot, he did not want
to throw away a used Blackberry (smart phone). He visited a local retailer that offered
an electronics recycling service, but was surprised to learn they were going to charge
him to recycle it. Having worked at eBay, Ganot knew the phone had value and could be
sold. He walked away thinking, “this is never going to work, consumers are not going to
pay to recycle.”

Ganot dan co-founder Rousseau Aurelien secara independen memahami ide yang
dijadikan Gazelle berdasarkan pengalaman pribadi mereka berurusan dengan
perangkat elektronik yang mereka gunakan (lihat Exhibit 1 untuk informasi biografis
Ganot, ia tidak ingin membuang Blackberry yang digunakannya (smart phone). Ia
mengunjungi retailer lokal yang menawarkan layanan daur ulang elektronik, tetapi
sangat mengejutkan saat mereka mempelajari biaya daur ulang itu. Setelah bekerja di
eBay, Ganot tahu bahwa telepon memiliki nilai dan bisa dijual. Dia melangkah sembari
berpikir, "ini tidak akan pernah berhasil, konsumen tidak akan membayar untuk daur
ulang."

Ganot continued to think about the potential value in used consumer electronics and
over time he developed a motivation to build a business around rewarding consumers
for smart consumption. A few years later he moved to Boston and connected with
Aurelien who had begun to develop a similiar plan. The two enterpreneurs launced
Gazelle in early 2006 with the vision to redefine the consumption of consumer
electronics.

Ganot terus berpikir tentang nilai potensial dalam menggunakan konsumsi

elektronik dan dari waktu ke waktu ia mengembangkan motivasi untuk membangun
penghargaan bisnis di seluruh konsumen untuk konsumsi pintar. Beberapa tahun
kemudian ia pindah ke Boston dan terhubung dengan Aurelien yang sudah mulai
mengembangkan rencana yang sama. Kedua pengusaha meluncurkan Gazelle di awal
tahun 2006 dengan visi untuk mendefinisikan konsumsi dari konsumen elektronik.

Together, Aurelien and Ganot launched under the name “Second Rotation.” The
founders’ early plan was to approach major retailers, such as Best Buy and Wal-Mart,
and convince them to offer a trade-in service that paid customers for tuning in their
used, but still working electronic device. Second Rotation would buy the devices from
the retailers and sell them on the used market. The first years was difficult. Ganot and
Aurelien approached retailers, but the retailers were not ready to move.

Bersama-sama, Aurelien dan Ganot meluncurkan dibawah nama "Second

Rotation." Rencana awal para pendiri adalah mendekati retailer besar, seperti Best Buy
dan Wal-Mart, dan meyakinkan mereka untuk menawarkan layanan tukar tambah yang
dibayar pelanggan untuk tuning yang mereka gunakan, namun masih mengerjakan
perangkat elektronik. Rotasi kedua akan membeli perangkat dari retailer dan digunakan
untuk menjualnya di pasar. Tahun-tahun pertama ini sulit. Ganot dan Aurelien
mendekati retailer, tetapi ritel tidak siap untuk beralih.

At the time, both believed that a green movement was underway and some consumers
were beginning to question their overall impact on the environment and might consider
ways to reduce it. They came to realize, however, that few business services aimed at
taking advantage of this movement had evolved. The idea of Second Rotation seemed to
be ahead of its time.

Pada saat itu, keduanya percaya bahwa gerakan hijau sedang berlangsung dan
beberapa konsumen mulai mempertanyakan dampak keseluruhan terhadap lingkungan
dan mungkin mempertimbangkan cara-cara untuk mengurangi itu. Mereka menyadari,
bagaimanapun, bahwa layanan bisnis yang ditujukan untuk mengambil keuntungan dari
gerakan ini telah berevolusi. Ide Second Rotation tampaknya berjalan untuk saat ini.

In 2007, after returning from yet another meeting with a major retailer that rejected
their idea, Ganot and Aurelien decided to strike out on their own. They decided to go
directly to consumers : develop a website to solicit used electronics from them and then
sell those devices themselves on eBay. Second Rotation launched the website later that
year and soon had products coming in the door. In mid-2008, Second Rotation created
the name “Gazelle” for branding and operational purposes : its legal name remained
“Second Rotation” while customers only saw “Gazelle”.

Pada tahun 2007, setelah kembali dari pertemuan lain sebelum retailer besar
yang menolak ide mereka, Ganot dan Aurelien memutuskan untuk strike out dari idenya
sendiri. Mereka memutuskan untuk langsung ke konsumen : mengembangkan situs web
untuk mengumpulkan elektronik bekas dari mereka dan kemudian menjual alat-alat
sendiri di eBay. Second Rotation meluncurkan website akhir tahun itu dan segera
mendatangkan produknya di depan pintu. Pada pertengahan 2008, Second Rotation
menciptakan nama "Gazelle" untuk branding dan tujuan operasional : Nama hukumnya
tetap "Second Rotation" sementara pelanggan hanya melihat "Gazelle".

Gazelle had initially launched with funding from angel investors. In 2007 and
again in 2008 the company had received venture capital funding totaling $23 million.

Gazelle awalnya diluncurkan dengan dana dari investor penolong. Pada tahun
2007 dan lagi pada tahun 2008 perusahaan telah menerima dana venture capital
sebesar 23 juta US$.

The Business Opportunity

In recent decades there had been a significant increase in the number of consumer
electronic product sold. Devices such as computers, cell phones, and digital cameras
which essentially had not existed in earlier generations had become ubiquitous by 2010.
(see Exhibits 2 dan 3 for historical sales data on consumer electronic devices).

Dalam beberapa dekade terakhir telah terjadi peningkatan yang signifikan dalam
jumlah konsumsi produk elektronik yang dijual. Perangkat seperti komputer, ponsel,
dan kamera digital yang pada dasarnya tidak ada di generasi sebelumnya menjadi dapat
ditemukan dimana-mana pada tahun 2010. (lihat Exhibits 2 dan 3 untuk historis data
penjualan pada konsumen perangkat elektronik).

Historically, consumers used their electronic devices for a period of time, but when they
finished using them they either threw away in the trash or stored them in their home.
Very few devices were recycled or transferred to another consumer to use. Gazelle had
identified four major macroeconomic forces that were leading consumers to look for
other options for the disposal of the electronic devices they no longer needed.

Secara historis, konsumen menggunakan perangkat elektronik mereka untuk

jangka waktu tertentu, tetapi ketika mereka selesai menggunakan mereka juga
membuang di tempat sampah atau menyimpannya di rumah. Sangat sedikit perangkat
yang didaur ulang atau dipindahkan ke konsumen lain untuk dapat digunakan. Gazelle
telah mengidentifikasi 4 gaya makroekonomi utama yang mengarah ke konsumen untuk
mencari opsi lain pembuangan perangkat elektronik ysng tidak lagi mereka butuhkan.

Financial The downturn in the general economy which began in 2007 and
accelerated in 2008 had caused consumers to be more careful about how they spent and
managed their money.

Unemployment levels in the U.S. increased significantly and many employed individuals
feared losing their jobs. This led to an environment of belt tightening in which in which
it did not make sense to store or throw away a device that could be sold for cash.
Further, the acquisition and use of used products was increasingly seen as socially
acceptable. Online retail business such as eBay and Amazon had developed channels
through which consumers could more easily estimate the value of devices they owned
and also buy and sell used goods.

Keuangan Melemahnya general economy yang dimulai pada tahun 2007 dan
dipercepat pada tahun 2008 telah menyebabkan konsumen lebih berhati-hati tentang
bagaimana mereka menghabiskan dan mengelola uang mereka.

Tingkat pengangguran di AS meningkat secara signifikan dan banyak orang yang bekerja
takut kehilangan pekerjaan mereka. Hal itu mengakibatkan lingkungan pengencangan
ikat pinggang di mana tidak masuk akal untuk menyimpan atau membuang perangkat
yang dapat dijual menjadi uang tunai. Selanjutnya, akuisisi dan penggunaan produk
yang digunakan adalah semakin dipandang untuk dapat diterima secara sosial. Bisnis
ritel online seperti eBay dan Amazon telah mengembangkan channel yang mana
konsumen bisa lebih mudah memperkirakan nilai perangkat yang mereka miliki dan
juga membeli dan menjual barang-barang bekas.

New Product Introductions Technological advances following Moore’s

Law (Moore’s Law referred to Intel Corporation’s founder Gordon Moore’s 1965
assertion that the number of transistors that manufactures could place on a single
integrated circuit chip would double every two years. The rate oftechnological advances
had generally Moore’s Law into 2010) and developments in broadband wireless
communications infrastructures enabled manufactures to introduce a wide variety of
new costumer electronic products at an ever increasing pace. These latest generation
products came with new features and faster performance. At the same time, the
previous generation products remained highly functional with significant remaining
useful life. Consumers who valued owning the latest devices looked to upgrade soon
after new product lauches. Other consumers were content to use nearly new product
launches. Other consumers were content to use nearly new products that could be
purchased for a lower cost from consumers who upgraded earlier.

Environmental The idea